Interest in crypto has skyrocketed since the bull run started, and despite the prices of significant currencies being at new lows since the bull run highs, these currencies are a hot topic.
The cryptocurrency segment as a whole sector is still relatively infant, and there new developments and changes are constant, and recent updates keep coming in every other day. While it is tough to predict the next big thing or where we are headed, we can look at leading trends.
Where does the market stand?
The open interest in Cryptocurrency as a financial asset has risen to new highs. Over the past 2 years, nearly 20,000 cryptocurrencies rushing to be on the top. The total market capitalization of cryptocurrencies reached an all-time high of just over 3 trillion USD on 10 November 2021, retracing to pre-bull run levels of under 1 trillion.
As the interest in these digital currencies rises globally, more people are planning to start learning more about them and investing in them for monetary gains.
Let’s take a brief look at 6 of the latest trends in the crypto market space:
NFTs, or non-fungible tokens, have gained immense popularity since the bull run started. These unique tokens are created or minted on blockchains and can not be replicated. As shown by games and metaverse worlds, you can create digital content formats on NFTs. such as music, artwork, and real estate.
These can then be tokenized, and the tokens can be traded for money. The mainstream adoption started in 2021 and 2022, with various organizations across tech, fashion, and other sectors creating NFTs.
It is expected that NFTs will grow as a trend as people find new real-world use cases for these. The interest is likely to increase with the possibility of organizations such as art galleries, auction houses, and museums taking more interest in NFTs.
2. Institutional and universal adoption
El Salvador became the first country to adopt Bitcoin as a legal tender. As a result, there are more chances of cryptocurrencies growing as assets
It is now becoming a trend as more and more businesses, organizations, and even countries may be planning the adoption or investment into cryptocurrency. Many institutions and prominent investors are already investing, which will help the asset class to gain more popularity. Furthermore, many financial service providers have extended crypto-related services, such as transactions with crypto exchanges for money transfers.
3. Regulations and framework
Since cryptocurrencies are still very early in various aspects, many countries do not have laws or regulatory frameworks on these being traded as an asset class. This has been limiting the potential of the crypto market, and it remains to be seen how such rules or laws will impact it. Policymakers in most countries are yet to decide on details related to trading and frameworks for projects such as metaverses and NFTs.
4. Exchange-traded funds
One of the most significant positive factors for any asset class is for it to be traded as an exchange-traded fund or an ETF. Primary cryptocurrency Bitcoin first created history in the crypto space by getting an ETF that went live on the New York Stock Exchange in 2021.
This allows the investors to comfortably invest their money in crypto through a traditional stock exchange. The only caveat is that the current ETF may not follow the live Bitcoin price closely as it has Bitcoin Futures Contracts and may not hold the funds directly. The next big step is the creation of ETFs that hold cryptos directly, something that many investors are waiting for.
5. Web 3.0
Already creating waves of discussion, the next trend on the list is Web3.0. After the era of Web1.0 and Web2.0, this is the next stage, bringing in an age of decentralization for the internet. Web3.0 will allow users to create or mint their preferred content through NFTs and blockchains and make money.
It is based on blockchain technologies such as decentralized ledgers, e-wallets, and smart contracts. It can also become an excellent solution for those who want to create websites without depending upon services from tech giants and corporations that charge enormous fees for such solutions.
Decentralized Finance, or DeFi, is another trend to revolutionize finance and how financial transactions happen traditionally. Since its mainstream popularity began in 2017, it has only risen with time. Some reports show that the TVL (Total Value Locked) of cryptocurrencies under DeFi smart contracts has grown from 2 to 15 billion USD. Various projects related to staking and yield farming have risen to immense popularity.
There are many prominent and leading projects with unique use cases, such as deflationary yield in the case of projects like the Drip Network and staking in the case of BNB.
Even as the crypto landscape is evolving and shaping itself, trends like Metaverse, DeFi, and NFTs are helping bring more traction and popularity to the sector.
These trends will go a long way in helping shape the crypto future and help new investors in seeing changes with more clarity. Since more and more people are investing and welcoming these trends with open arms, you should also keep an eye out for future developments.